Will Boris Johnson reduce the enormous influence that Russian oligarchs have in the UK? That is the question on the minds of many people in the country. In response to the Russian invasion of Ukraine, the prime minister announced a series of measures to crack down on the oligarchs’ “dirty money.” “You will have nowhere to hide your ill-gotten gains,” threatened Johnson. His words, however, did not match the facts since, initially, he only sanctioned three oligarchs and five banks. In the face of criticism, he extended the sanctions to a hundred companies and individuals, and cancelled the so-called “golden visa”, which automatically granted residence permits to all foreigners who invested two million pounds in the country.
The UK has always been seen by some Russian oligarchs and kleptocrats as a safe place to invest. The anti-corruption organization Transparency International revealed in its latest report in February that £6.7 billion (€8.1 billion) of “dirty money” has been invested in the British real estate market since 2016, of which £1.5 billion came from Russian billionaires accused of financial crimes or with links to the Kremlin. Most of these properties (55%) are held by offshore companies.
Transparency International believes the figures could be higher because there are 90,000 properties across the country owned by opaque companies, so neither the British government nor law enforcement can know who their real owners are. It also identifies 2,189 companies registered in the UK and its overseas territories and Crown Dependencies used in 48 cases of corruption and money laundering in Russia. And it says the UK is the “global center of money laundering” and reputation laundering.
The UK government this week introduced a bill in Parliament that would serve to unmask the true owners of shell companies that own property in the UK. The new legislation, which also aims to make sanctions retroactive, would force foreign companies to declare the identity of their true owners. Failure to do so would expose them to asset forfeiture. The reform may take months to pass.
For many years, the government has been accused of facilitating this investment of “dirty money” and turning a blind eye. The measures against Russian oligarchs were first announced after the poisoning of Russian double spy Sergey Sripal on British soil in 2018 with Novichok nerve gas. The then prime minister, Theresa May, held Putin directly responsible for the attack and announced actions against oligarchs such as Roman Abramovich, who was linked to corruption and the Russian president.
An analysis by the think tank Open Democracy suggests that there are thousands of companies on the British business register controlled by Russian citizens and some are linked to Putin’s allies. Roman Abramovich, in addition to Chelsea, controls two other British firms, while Russia’s richest man, Alexei Mordashov, who is very close to Putin, also heads several British companies, including the Nord Gold mining company.
The hardening of the British stance has led some oligarchs to take action. Just this week, Abramovich put Chelsea, a club he bought for £140 million in 2003 and could end up selling for £3 billion, according to expert estimates. The tycoon has not yet been sanctioned, but the Labour opposition leader has called for him to be included in the next round of sanctions. Some sources claim that Abramovich has also put some of the luxury homes he owns in the country up for sale.